FAQ by TOPIC

A deductible is an amount that you're responsible for in the event of a loss. This is the amount you pay out-of-pocket, and insurance covers the remainder.

When speaking with your agent to set up your policy, any valuables you are concerned about and our agent can review your policy and recommend changes to ensure your valuables have proper coverage.

COBRA – The Consolidated Omnibus Budget Reconciliation Act – requires group health plans to offer continuation coverage to covered employees, former employees, spouses, former spouses, and dependent children when group health coverage would otherwise be lost due to certain specific events. Those events include the death of a covered employee, termination or reduction in the hours of a covered employee’s employment for reasons other than gross misconduct, a covered employee’s becoming entitled to Medicare, divorce or legal separation of a covered employee and spouse, and a child’s loss of dependent status (and therefore coverage) under the plan. COBRA sets rules for how and when continuation coverage must be offered and provided, how employees and their families may elect continuation coverage, and what circumstances justify terminating continuation coverage. Employers may require individuals to pay for COBRA continuation coverage. The premium that is charged cannot exceed the full cost of the coverage, plus a 2 percent administration charge. 

Employers may require individuals to pay for COBRA continuation coverage. The premium that is charged cannot exceed the full cost of the coverage, plus a 2 percent administration charge. 

A group health plan is required to offer COBRA continuation coverage only to qualified beneficiaries and only after a qualifying event has occurred. 

A qualified beneficiary is an individual who was covered by a group health plan on the day before a qualifying event occurred and who is an employee, the employee’s spouse or former spouse, or the employee’s dependent child. In certain cases involving the bankruptcy of the employer, a retired employee, the retired employee’s spouse (or former spouse), and the retired employee’s dependent children may be qualified beneficiaries. In addition, any child born to or placed for adoption with a covered employee during a period of continuation coverage is automatically considered a qualified beneficiary. An employer’s agents, independent contractors, and directors who participate in the group health plan may also be qualified beneficiaries. 

“Qualifying events” are events that cause an individual to lose group health coverage. The type of qualifying event determines who the qualified beneficiaries are for that event and the period of time that a plan must offer continuation coverage. COBRA establishes only the minimum requirements for continuation coverage. A plan may always choose to provide longer periods of continuation coverage and may choose to contribute toward the cost of the coverage.

The following are qualifying events for a covered employee if they cause the covered employee to lose coverage: 

• Termination of the covered employee’s employment for any reason other than “gross misconduct”; or
• Reduction in the covered employee’s hours of employment. 

The following are qualifying events for a spouse and dependent child of a covered employee if they cause the spouse or dependent child to lose coverage: 

• Termination of the covered employee’s employment for any reason other than “gross misconduct”;
• Reduction in hours worked by the covered employee; 
• Covered employee becomes entitled to Medicare; 
• Divorce or legal separation of the spouse from the covered employee; or
• Death of the covered employee. 

In addition to the above, the following is a qualifying event for a dependent child of a covered employee if it causes the child to lose coverage: 

• Loss of “dependent child” status under the plan rules. Under the Patient Protection and Affordable Care Act, plans that offer coverage to children on their parents’ plan must make coverage available until the adult child reaches the age of 26. 

Maximum Periods

COBRA requires that continuation coverage extends from the date of the qualifying event for a limited period of time of 18 or 36 months. The length of time for which continuation coverage must be made available (the “maximum period” of continuation coverage) depends on the type of qualifying event that gave rise to the COBRA rights. A plan, however, may provide longer periods of coverage beyond the maximum period required by law.

When the qualifying event is the covered employee’s termination of employment (for reasons other than gross misconduct) or reduction in hours of work, qualified beneficiaries must be provided 18 months of continuation coverage.

When the qualifying event is the end of employment or reduction of the employee’s hours, and the employee became entitled to Medicare less than 18 months before the qualifying event, COBRA coverage for the employee’s spouse and dependents can last until 36 months after the date the employee becomes entitled to Medicare. For example, if a covered employee becomes entitled to Medicare 8 months before the date his/her employment ends (termination of employment is the COBRA qualifying event), COBRA coverage for his/her spouse and children would last 28 months (36 months minus 8 months).

For all other qualifying events, qualified beneficiaries must be provided 36 months of continuation coverage.